The Pension Protection Fund (PPF) has confirmed it intends to stick with its original plan to collect £700million in levies during 2010/11 rather than increasing it.
Any employer which has a defined benefit pension scheme, even if this is closed, must contribute towards the finance of the PPF via the levy.
PPF chief executive, Alan Rubenstein, told the CBI’s annual pensions conference yesterday that this fulfills a commitment made in August 2007 when the PPF said that it would keep the levy estimate stable for three years.The announcement has been made earlier in the year than normal to help ease the continuing economic uncertainty faced by employers and pension schemes which have to pay the PPF levy.
Rubenstein said: “Despite the economic climate deteriorating considerably since last year, we believe it’s important to stick to our commitment made in 2007 to keep the total amount of levy we aim to collect stable for three years.
“While pension schemes won’t be able to calculate their individual levy bills until later in 2009, we felt it was important that we recognise now the financial difficulties that many employers and pension schemes are experiencing and to reassure them that we won’t be raising in real terms the total levy we want to collect during 2010/11.”
Claire Carey, partner at Sacker and Partners, commented: “It is clearly good news that the PPF intends to fulfil its commitment to keep the overall levy stable for a three-year period.But employers and trustees would no doubt be keener to see this being shared out as fairly as possible between schemes.”
Tyron Potts, an actuary at Barnett Waddingham ,added: “Pension schemes will be reassured by the news that the total PPF levy collection will not increase significantly next year.
“However, each month we hear of new schemes being assessed for entry into the PPF, each adding to the PPF’s growing deficit, and leaving behind a diminishing pool of viable companies to pick up the tab.”